Texas Society Cpa Tarrant Nonprofit Presentation 62612
Transcript of Texas Society Cpa Tarrant Nonprofit Presentation 62612
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TEXAS SOCIETY OF CERTIFIED
PUBLIC ACCOUNTANTS
FORT WORTH CHAPTER
NON-PROFIT STUDY GROUP
P R E S E N T E D B Y
R U S S E L L D . C A W Y E R
J U N E 2 6 , 2 0 1 2
Common Employment Law Issuesfor Non-Profit Organizations
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Topics
Use of Volunteers by Non-Profits
Unpaid Internships
Proper Classification of IndependentContractors
Proper Classification of Employees
Non-Profit Use of Employee Handbooks
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Consequences of Improper Classification of
Employees as Independent Contractors
Overtime claims
Claims for unpaid employment taxes (i.e., FICA,FUTA, unemployment)
Claims for benefits available only to employees Contractors dont participate in employer-
sponsored health, retirement or pension plans
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Employee/Independent Contractor Tests
JudicialTest/EconomicRealities Test
TexasWorkforceCommissionTexas
IRS Test
BehavioralControl
FinancialControl
Type ofRelationship
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Economic Reality Test
the degree of control exercised by the allegedemployer
the extent of the relative investments of the work and
the alleged employer the degree to which the worker's opportunity for
profit or loss is determined by the alleged employer
the skill and initiative required in performing the job
the permanency of the relationship
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Voluntary Classification Settlement Program
IRS program allows employers to reclassify independentcontractors as employees
Collect unpaid payroll taxes for employees improperlyclassified as independent contractors
Employers self-report and pay past federal payroll taxes
Participating employers avoid federal penalties and
interest Program does not prohibit others from pursing claims
against self-reporting company
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VCSP Frequently Asked Questions
IRS says it will not share information about VCSPapplicants with state or federal DOL
Employers that apply for, but are not accepted into
VCSP, will not be automatically subjected to an audit Participation in VCSP is not an admission of liability
or wrongdoing
Class action Plaintiff lawyers are not bound by these
representations from the IRS
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Use of Volunteers
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Non-Profit Use of Volunteers
DOL W&H recognizes that a person may volunteer time to non-profit organizations
Persons will not be considered an employee for FLSA purposes ifthe individual volunteers freely, and without contemplation orreceipt of compensation
Volunteers usually serve on a part-time basis and do not displacepaid workers or perform work that would otherwise be performedby employees
Volunteer is An individual who performs hours of service for apublic agency for civic, charitable, or humanitarian reasons, withoutpromise, expectation or receipt of compensation for services
rendered[.] volunteer has been interpreted as containing two requirements:
(1) a civic, charitable, or humanitarian reason (underlyingmotivation for wanting to obtain the position); and (2) the absenceof an expectation of, or actual compensation for services rendered
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Practice Tips for Using Volunteers
Have volunteers sign acknowledgments stating that:
They are volunteering of their own volition without coercion orduress;
That they are doing so for their own civic, charitable, religious
or humanitarian reasons; and
That they have no expectation of receiving any pay orremuneration for their volunteer service
Do not refer to volunteers as employees in written or
oral communications
Keep volunteer service to part-time commitments
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Unpaid Internships
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Unpaid Internship Test
Is the training similar to what would be given in a vocationalschool or academic educational instruction?
Is the training for the benefit of the trainees or students?
Do the trainees or students work under their close observation
of regular employees without displacing them? Does the employer derive no immediate advantage from the
activities of the trainees or students, and on occasion are theemployers operations actually impeded?
Are the trainees or students not necessarily entitled to a job at
the conclusion of the training period? Do the employer and the trainees or students understand that
the trainees or students are not entitled to wages for the timespent in training?
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Non-Profit & Employee Handbook
Often too small for coverage under mostdiscrimination laws
Grant programs and other funders often expect these
kinds of policies Give employees notice of expectation
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Must-Have Policies
At-Will Disclaimer
ADR Policy/Risk Avoidance
FLSA Safe Harbor
Neutral Absence Control Policy